Amit Burman, Chief Executive Officer, Dabur Foods Ltd

Indian consumers are very smart. They feel that packaged goods are not fresh. They also give importance to value for money. If they feel it will be cheaper for them to buy fruits and process them at home, they will not pay a premium for convenience. They are also brand conscious, but the most important fact is that they want a good value-for-money proposition.

Amit Burman is responsible for Dabur India’s foray into the processed foods business with the setting up of Dabur Foods Ltd. He is responsible for driving all business strategy, development and communications at Dabur Foods India Ltd. It is to his credit that Dabur Real and Hommade are household names and the company is the leader in the Indian packaged fruit juice market.

Amit took over the reins as CEO of Dabur Foods in 1999. He began his career at Dabur in 1992 in the Industrial Engineering Department, where he was responsible for the induction of machinery, method improvement, manpower reduction and improving product packaging.

In 1990, Amit joined Colgate Palmolive, New York, USA, where he worked for two years in the Manufacturing Strategy Department, which operated as the internal consultants to the organisation. His stint with Colgate Palmolive provided him invaluable experience working with a multinational. In the summer of 1990, he trained for six months at Tishcon Corporation New York, USA, where he was responsible for the safety of stock and optimum inventories.

In an interview with exchange4media’s Saurabh Niranjan Turakhia, Burman talks about Dabur Foods’ future plans, the impact of modern trade on retail and key insights about the Indian consumer.

Q. What are Indian and global trends characterising the food processing space?

More and more people want fresh fruits – fruits as good as plucked from the farm. There is also a psychological barrier that packaged fruits are not fresh. As organised retail grows and better investments are made, we will be able to overcome this.

Modern retail certainly brings an impetus of higher growth for the retail industry. With organised retail, investments in refrigeration and other necessary areas would take place, which will ultimately help the domain grow.

We have invested around Rs 25 crore in our Siliguri unit. The investment depends on the fruit involved and the kind of processing desired. The investment may range anywhere from Rs 5 crore to Rs 50 crore. Right now, our unit can only deal with aseptic fruits, but a bigger demand is for the frozen line, which calls for higher investments. We also plan to venture into it over the next 4-5 years.

Indian consumers are very smart. They feel that packaged goods are not fresh. They also give importance to value for money. If they feel it will be cheaper for them to buy fruits and process them at home, they will not pay a premium for convenience. They are also brand conscious, but the most important fact is that they want a good value-for-money proposition.

This product has been launched for kids and families to give them summer drinks made from summer fruits. We have plans to work on two different kinds of campaigns. So, while on one hand, we are trying to be present across media, we are also getting the consumers to taste the product through various consumer activities in stores.

We are in a comfortable position as we are the No. 1 player in the space. We have a big opportunity. We also believe that exports, too, have great potential. As of now, we are only exporting mango products, but soon we would like to start exporting pineapple products, which hold a lot of promise. Pineapple products’ share is almost half the nearly Rs 1.4 billion world potential. Right now, the only players dealing in pineapple products are the Philippines and Thailand. We feel there is great scope for such products in Europe and the US.

Talking about challenges, one major challenge is the waste that takes place in transit. There is a need to have infrastructure geared up to avoid this. There are investments needed in cold chain at the back end and in retail stores at the front end.

As of today, we have invested around Rs 25 crore in our Siliguri unit, which will enable us to have a multi-fruit line. We have plans in future to concentrate on pineapple products, which have great export potential. Our Siliguri outfit will help us in that.

We think of the potential in terms of share of stomach. So, we compete with everything other than our products that will enter a consumer’s stomach. One also has to understand that fruit juices are a lot healthier when compared to soft drinks. Worldwide and in India, they are witnessing lower growth.

As of now, we are trying to grow the category as being the market leader we will reap the maximum benefits. Celebrities are useful when there is a market share game. At present, we are not into that.

We are in talks with the Horticulture Department of West Bengal. We are educating farmers on how to have better yields and hence, how to maximise output. Since our unit is close to the fruit growing area, we ask the farmers to send us as much produce as is possible for them as this would avoid transit wastage.

We have made Real into an over Rs 100 crore brand. One of our key objectives is to grow Real and sustain it as well. Apart from that, we have a lot of activities lined up to grow Activ and Coolers. We will be investing substantial amounts in order to make the consumer aware about both these brands and explain their positioning. We have a practice of dedicating around 12 per cent of our turnover to marketing and advertising activities. Considering we have a turnover target of Rs 250 crore for the coming year, we will be spending around Rs 30 crore for marketing and advertising.

We have introduced a Mosambi (sweet lime) flavour in ‘Real’. We are also seeing the possibilities of a couple of new variants of Activ, but it is not the right time to discuss it. We have four new variants of Coolers as well.

Health drinks are more serious drinks. We like to be known as a tasty product – a product that the kids and others will demand. There is a greater element of fun in the products we have.

Bharati and Reliance are entering the fresh fruit space, which is not where we are present. Their challenges are much more. Perishability will be an issue for them. Having said that, entry of more players will help the industry grow.